Sponsors (4)
Official title: Improve supply chain resiliency for critical drug products with vulnerable supply chains and ensure that reserves of critical drugs and active pharmaceutical ingredients are maintained to prevent supply disruptions in the event of drug shortages or public health emergencies.
Introduced June 12, 2025 by Gary C. Peters · Last progress June 12, 2025
The bill increases U.S. drug-supply resilience and reduces shortage risk by building reserves and boosting domestic capacity, at the trade-off of upfront federal spending and higher compliance/procurement costs that could raise drug prices and grant emergency allocation powers that may disrupt commercial activity.
Hospitals and patients (especially those with chronic conditions) are less likely to experience drug shortages because HHS must maintain and regularly replenish a six‑month reserve of critical drugs and APIs and prioritize domestic/OECD manufacturing and surge capacity.
Manufacturers and local economies could gain from a $500 million FY2026 federal investment to build or renovate non‑federal manufacturing capacity, which can increase domestic production and create jobs.
Clinicians, hospital supply planners, and Congress will have better information for planning and oversight because HHS must publish lists of critical vulnerable drugs/APIs and provide biennial program effectiveness reports.
Patients (particularly those with chronic conditions), hospitals, and payers could face higher drug prices or reduced manufacturer margins because suppliers will incur higher compliance and inventory costs to maintain six‑month reserves and preference for domestic/OECD sourcing may reduce competition.
Taxpayers will bear a direct federal cost—at least $500 million in FY2026—and may face additional appropriations to fund ongoing reserves and related contracts.
Manufacturers, distributors, and other eligible entities may face disruptions to commercial contracts and inventory planning because the HHS Secretary would have authority to direct transfers and allocate supplies during emergencies.
Based on analysis of 2 sections of legislative text.
Directs HHS to contract with entities to maintain a regularly replenished multi‑month reserve of critical drugs and APIs, favoring domestic/OECD sourcing and domestic manufacturing capacity.
Creates a federally supported "rolling" reserve of critical drugs and their active pharmaceutical ingredients (APIs) with vulnerable supply chains. HHS will contract with eligible entities to store a multi‑month supply domestically or in approved foreign facilities, require regular replenishment with recently manufactured product, and enable the Secretary to direct production or allocation when supplies are needed. The law requires HHS to publish the list of covered drugs/APIs, issue guidance on how items and vendors are chosen, favor domestic manufacturing or sourcing from OECD countries, and prioritize awards that strengthen U.S. manufacturing capacity and supply‑chain resilience.